UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF

Case 1:12-cv-03704-SAS-MHD Document 342 Filed 09/22/14 Page 1 of 15
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
FERNANDA GARBER, MARC LERNER,
DEREK RASMUSSEN, and GARRETT
TRAUB, representing themselves and all
other similarly situated,
OPINION AND ORDER
Plaintiffs,
12 Civ. 3704 (SAS)
- against OFFICE OF THE COMMISSIONER OF
BASEBALL, et al.,
Defendants.
-------------------------------------------------------- )(
SHIRA A. SCHEINDLIN, U.S.D.J.:
I.
BACKGROUND
On August 8, 2014, I denied defendants' joint motion for summary
judgment in Laumann v. National Hockey League and Garber v. Major League
Baseball. 1 I ruled that the Office of the Commissioner of Major League Baseball
and other entities related to Major League Baseball ("MLB Defendants") were not
shielded from antitrust liability by the well-established "baseball exemption." On
See Laumann v. National Hockey League, et al., No. 12 Civ. 817 and
No. 12 Civ. 3704, 2014 WL 3900566 (S.D.N.Y. Aug. 8, 2014). For the purposes
of this Opinion, familiarity with the underlying facts is assumed.
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August 27, 2014, the MLB Defendants moved to certify an interlocutory appeal on
that ruling. On September 8, 2014, Comcast filed a letter on behalf of all television
defendants involved in the Garber case ("Television Defendants"), joining the
MLB Defendants' motion. 2 For the reasons set forth below, the motion is
DENIED.
II.
APPLICABLE LAW
A.
The Baseball Exemption
Because my August 8, 2014 opinion discusses the baseball exemption
at length, 3 I summarize it only briefly here. In 1922, in Federal Baseball Club of
Baltimore v. National League ofProfessional Baseball Clubs, the Supreme Court
held that "the business [ofJ giving exhibitions of baseball" was not subject to the
Sherman Act. 4 Since then, the exemption has been upheld by the Supreme Court
numerous times, most recently in Flood v. Kuhn, where it explained that the
exemption, despite being "an aberration," 5 should be modified by "congressional,
2
See Television Defendants' Letter of September 8, 2014 ("TV Def.
Let.").
See Laumann, 2014 WL 3900566, at *5-*6.
4
259 U.S. 200, 208 (1922).
407 U.S. 258, 282 (1972)
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and not judicial, action. " 6 In 1998, Congress passed the Curt Flood Act, which
effectively removed employment-related agreements from the baseball exemption.
The Act did not alter the applicability of the antitrust laws to "any conduct, acts,
practices, or agreements other than ... employment of major league baseball
players." 7
B.
Interlocutory Appeals
Interlocutory appeals of district court decisions are governed by
28 U.S.C. § 1292(b). For an interlocutory appeal to be appropriate, the underlying
order must "(l) involve a controlling question of law (2) over which there is
substantial ground for difference of opinion," and the moving party must also show
that "(3) an immediate appeal would materially advance the ultimate termination of
the litigation." 8
Interlocutory appeals are presumptively disfavored. Leave to appeal
is warranted only when the moving party can point to "exceptional circumstances"9
sufficient to "justify a departure from the basic policy of postponing appellate
6
Id. at 285.
7
15 U.S.C. § 26b(b).
28 U.S.C. § 1292(b).
9
Williston v. Eggleston, 410 F. Supp. 2d 274, 276 (S.D.N.Y. 2006).
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review until after the entry of a finaljudgment." 10 Interlocutory appeal "is not
intended ... to provide early review of difficult rulings in hard cases." 11 Rather, it
is appropriate only in "extraordinary cases where appellate review might avoid
protracted and expensive litigation," and where it poses no threat of "piecemeal
litigation." 12 Whether an interlocutory appeal is warranted lies squarely within the
discretion of the district court. 13 Indeed, even when the elements of section
l 292(b) are satisfied, the district court retains "unfettered discretion" to deny
certification. 14
IV.
DISCUSSION
Because the applicability of the baseball exemption is indisputably a
10
In re Madoff, No. 08 Civ. 1789, 2010 WL 3260074 (S.D.N.Y. Aug. 6,
2010) (citing In re Flor, 79 F .3d 281, 284 (2d Cir. 1996) (quotation marks and
citations omitted)).
11
In re Levine, No. 03 Civ. 7146, 2004 WL 764709, at *2 (S.D.N.Y.
Apr. 9, 2004).
12
In re AroChem Corp., 176 F.3d 610, 619 (2d Cir. 1999). Accord Ted
Lapidus, S.A. v. Vann, 112 F.3d 91, 95 (2d Cir. 1997).
13
See, e.g., Swint v. Chambers Cnty. Comm 'n, 514 U.S. 35, 47 (1995)
("[D]istrict courts [have] first line discretion to allow interlocutory appeals."); In re
Kassover, 343 F.3d 91, 94 (2d Cir. 2003); DM Rothman Co. v. Cohen Mktg. Int'l,
Inc., No. 98 Civ. 7905, 2006 WL 2128064, at *l (S.D.N.Y. July 27, 2006).
14
National Asbestos Workers Med. Fund v. Philip Morris, Inc., 71 F.
Supp. 2d 139, 162-63 (E.D.N.Y. 1999) (assuming the statutory criteria were met
but nonetheless denying certification).
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"controlling question of law," 15 I move directly to the second and third elements of
section 1292(b).
A.
There Is No "Substantial Ground for Difference of Opinion"
Regarding the Baseball Exemption
For an issue to create "substantial ground for difference of opinion," 16
more than simple disagreement is required. Rather, the element is satisfied when
"(1) there is conflicting authority on the issue, or (2) the issue is particularly
difficult and of first impression for the Second Circuit." 17
Neither condition is met here. First, the MLB Defendants argue that,
contrary to my August 8, 2014 ruling, "the Supreme Court and all Circuit Courts
cases consistently hold that the exemption applies broadly to the 'business of
baseball,' not just ... to certain aspects of that business." 18 Accordingly, the MLB
Defendants conclude that substantial ground for difference of opinion exists
because "a trial court" - that is, this Court - "[has] rule[ d] in a manner which
15
Neither side disputes that a successful interlocutory appeal on the
baseball exemption issue would "terminate[] the action as to [the MLB
Defendants]." Defendants' Memorandum in Support of Certification ("Def.
Mem.") at 8.
16
28
u.s.c. § 1292(b).
17
Florio v. New York, No. 06 Civ. 6473, 2008 WL 3068247 (S.D.N.Y.
Aug. 5, 2008), at *1.
18
Def. Mem. at 9-10.
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appears contrary to the rulings of all Courts of Appeals which have reached the
issue." 19 But for the reasons set forth in my August 8, 2014 opinion, I do not
believe my ruling is contrary to existing law. 20 That issue has already been
decided, and I decline to reopen it here.
Second, the MLB Defendants suggest that "substantial ground for
difference of opinion 'may arise where an issue is difficult and of first
impression.'"21 In other words, even if my August 8, 2014 ruling does not clash
with other case law, if it implicates a question on which "the Second Circuit has
not spoken,"22 interlocutory appeal could still be warranted. But the silence of an
appellate court is not enough to satisfy section 1292(b). If it were, interlocutory
appeals would be the norm, not the exception. Rather, the "difficult and of first
impression" language refers to situations in which Second Circuit input could help
resolve disagreements among other Courts of Appeals. Because that is not the case
here, the MLB Defendants' argument is misplaced.
19
Id. at 10 (internal citations omitted).
20
See Laumann, 2014 WL 3900566, at *7-*8.
21
Def. Mem. at 12 (quoting Sky/on Corp. v. Guilford Mills, 901 F. Supp.
711, 718 (S.D.N.Y. 1995)).
22
Dinsmore v. Squadron, Ellenoff, Plesent, Sheinfeld & Sorkin, 945 F.
Supp. 84, 87 (S.D.N.Y. 1996).
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B.
Interlocutory Appeal Will Not "Materially Advance the Ultimate
Termination of the Litigation"
Additionally, I am not persuaded that an interlocutory appeal would
"materially advance the ultimate termination of the litigation." 23 The MLB
Defendants argue that "reversal by the Second Circuit may obviate the need for a
costly and intensely time-consuming trial and, depending on the speed of the
appeal, the incurrence of certain pre-trial expenses."24 While this is of course
possible, the operative phrase is "depending on the speed of the appeal." It is also
possible that an interlocutory appeal would delay the onset of trial, which is reason
enough to deny certification. 25
But even if the MLB Defendants are correct - that an interlocutory
appeal would more efficiently dispose of the claims against them -
the same is
not necessarily true of the claims against other defendants. The relationship
between the MLB Defendants' liability and Television Defendants' liability is a
complicated and disputed issue. According to the Television Defendants, allowing
23
28 U.S.C. § 1292(b).
24
Def. Mem. at 13.
25
See In re Oxford Health Plans, 182 F.R.D. 51, 53 (S.D.N.Y. 1998)
("An immediate appeal is considered to advance the ultimate termination of the
litigation if that 'appeal promises to advance the time for trial or to shorten the time
required for trial.'") (quoting 16 Charles Alan Wright, et al., Federal Practice and
Procedure§ 3930 (1996)).
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claims to proceed against them, when those same claims were barred against the
MLB Defendants would "effectively defeat [the MLB Defendants'] immunity."26
The Television Defendants therefore argue that if the claims against the MLB
Defendants were dismissed, the corresponding claims against the Television
Defendants would also have to be dismissed.
The Television Defendants' novel theory of intertwined liability
might eventually prevail. But the theory is currently untested, 27 and that by itself
counsels against certification. Under antitrust law, it is simply not clear if the fate
of the Television Defendants overlaps entirely with that of the MLB Defendants.
What is clear is that resolving this question - which has not even been fleshed out
in an exchange of premotion letters, much less fully briefed -
will require
expending significant judicial resources. If those resources are expended by the
26
TV Def. Let. at 1.
Both sets of defendants admit as much. The MLB Defendants admit it
explicitly when they note that the "reversal of the [baseball exemption holding]
with respect to the baseball exemption may result in dismissal of the [Television]
Defendants as well," but that it "[d]epend[s] []on the specifics of any ruling by the
Second Circuit." Def. Mem. at 8 (emphasis added). And the Television
Defendants admit it implicitly by highlighting two "analogous cases" - drawn
from very different factual settings - that they believe bolster their theory. TV
Def. Let. at 1. See Name.Space, Inc. v. Network Solutions, Inc., 202 F.3d 573, 57684 (2d Cir. 2000); Automated Salvage Transp. v. Wheelabrator Envtl. Sys., 155
F .3d 59 (2d Cir. 1998). If anything, these analogies underscore the complexity of
the legal question.
27
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Second Circuit during the course of an interlocutory appeal, the result will be
"piecemeal" adjudication. 28 If the resources are instead expended by this Court on
remand, the result will be further delay of trial. Neither outcome comports with
section 1292(b).
C.
The Scope of the Baseball Exemption Is Not A "Jurisdictional"
Question
Finally, the MLB Defendants argue that interlocutory appeal is
"especially advisable" because the baseball exemption implicates subject matter
jurisdiction. 29 The premise of this argument is misplaced. The scope of the
baseball exemption is not a jurisdictional issue. It is a threshold merits issue.
Although they point to numerous opinions that use the word
"jurisdiction" in connection with the baseball exemption, the MLB Defendants fail
to explain in what sense the question is jurisdictional. The closest they come is a
sparse citation to Salerno v. American League ofProfessional Baseball Clubs,
where, according to the MLB Defendants, the court reasoned that '"[it] lack[ed]
jurisdiction of the subject matter' because 'organized baseball does not fall within
28
AroChem, 176 F.3d at 619.
29
Def. Mem. at 3.
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the scope of the federal antitrust laws. "'30
But a court's subject matter jurisdiction does not evaporate every time
a federal statute is held not to apply to a particular defendant or class of defendants.
A statute like the Sherman Act grants subject matter jurisdiction to federal courts,
and from there, federal courts -
in the exercise of their jurisdiction - must decide
to whom the statute applies. In practice, federal courts often decide (for any
number of reasons) that a named defendant is not liable under the relevant statute.
It would be illogical, however, to conclude that this decision deprives a federal
court of authority to hear the case. Rather, it is because the federal court does have
authority to hear the case that it may decide to whom the statute applies. As the
30
Id. at 6 (quoting Salerno v. American League ofProf'/ Baseball
Clubs, 310 F. Supp. 729, 731(S.D.N.Y.1969), aff'd, 429 F.2d 1003 (2d Cir.
1970)). This parsing of Salerno's logic is questionable. The court in Salerno
actually said:
Since baseball is exempt from the federal antitrust laws by
decision of the United States Supreme Court, this complaint fails
to state a claim against defendant upon which relief can be
granted. Having found that no diversity of citizenship exists
under 28 U.S.C. sec. 1332 and having found that organized
baseball does not fall within the scope of the federal antitrust laws,
this Court lacks jurisdiction of the subject matter.
Salerno, 310 F. Supp. at 731 (emphasis added). In fact, then, Salerno is
ambiguous in its characterization of the baseball exemption. It first describes the
exemption as a merits issue, and then, in the next sentence, it re-characterizes the
issue as jurisdictional. Whatever the Salerno court had in mind, this is hardly the
controlling authority that the MLB Defendants make it out to be.
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Supreme Court has explained, subject matter jurisdiction "'in federal-question
cases is sometimes erroneously conflated with a plaintiff's need and ability to
prove the defendant bound by the federal law asserted as the predicate for reliefa merits-related determination. "'31 That is exactly what has occurred here. 32
V.
CONCLUSION
For the foregoing reasons, the MLB Defendants' motion to certify for
31
Arbaugh v. Y & H Corp., 546 U.S. 500, 511 (2006) (quoting 2 J.
Moore et al., Moore's Federal Practice§ 12.30[1] (3d ed. 2005)). Accord Da Silva
v. Kins ho Intern. Corp., 229 F .3d 358, 361 (2d Cir. 2000) (noting that courts "often
obscure the issue by stating that the court is dismissing 'for lack of jurisdiction'
when some threshold fact has not been established, without explicitly considering
whether the dismissal should be for lack of subject matter jurisdiction or for failure
to state a claim"). This logic also finds support in the distinction drawn by Rule 12
of the Federal Rules of Civil Procedure between ( 1) dismissal for lack of subject
matter jurisdiction and (2) dismissal for failure to state a claim upon which relief
can be granted. See Fed. R. Civ. P. 12.
32
The MLB Defendants' delay in raising the jurisdictional argument
only reinforces the point. This case has been ongoing for two years, and has
already involved extensive fact discovery. Yet it is only now, after losing on
summary judgment, that the MLB Defendants decided to bring these supposed
jurisdictional issues to the Court's attention. When asked at a September 5, 2014
conference why they did not raise the baseball exemption earlier, the MLB
Defendants explained that they "thought it best, given the plaintiff's complaint, to
be able to present [the baseball exemption argument]" in connection with "the best
set of facts," including "plaintiff's expert report." 915114 Transcript of Premotion
Conference, at 14-15. This analysis strongly suggests that the baseball exemption
presents a merits issue. The application of the exemption is undoubtedly a
question of law. But it is a question of law that- as the MLB Defendants
acknowledge - depends on facts. The same is not true of subject matter
jurisdiction, which concerns the Court's power over the type of controversy in
general, not on the specific facts of the case.
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immediate appeal is DENIED. The Clerk of the Court is directed to close this
motion (Dkt. No. 327).
SO ORDERED:
Dated:
September 22, 2014
New York, New York
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- Appearances For Plaintiffs:
Edward A. Diver, Esq.
Howard I. Langer, Esq.
Peter E. Leckman, Esq.
Langer Grogan & Diver, P.C.
Three Logan Square, Suite 4130
1717 Arch Street
Philadelphia, Pennsylvania 19103
(215) 320-5663
Kevin M. Costello, Esq.
Gary E. Klein, Esq.
Klein Kavanagh Costello, LLP
85 Merrimac St., 4th Floor
Boston, Massachusetts 02114
(617) 357-5034
Michael Morris Buchman, Esq.
John A. Ioannou, Esq.
Pomerantz Haudek Block Grossman & Gross LLP
600 Third A venue
New York, New York 10016
(212) 661-1100
Alex Schmidt, Esq.
Mary Jane Fait, Esq.
Wolf Haldenstein Adler Freeman & Herz LLP
270 Madison Avenue
New York, New York 10016
(212) 545-4600
Robert LaRocca, Esq.
Kohn, Swift & Graf, P.C.
One South Broad Street
Suite 2100
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Philadelphia, Pennsylvania 19107
(215) 238-1700
J. Douglas Richards, Esq.
Jeffrey Dubner, Esq.
Cohen, Milstein, Sellers & Toll, PLLC
88 Pine Street
New York, New York 10005
(212) 838-7797
For Defendants Office of the Commissioner of Baseball, Major League
Baseball Enterprises Inc., MLB Advanced Media L.P., MLB Advanced
Media, Inc., Athletics Investment Group, LLC, The Baseball Club of
Seattle, L.L.P., Chicago White Sox, Ltd., Colorado Rockies Baseball Club,
Ltd., The Phillies, Pittsburgh Baseball, Inc., and San Francisco Baseball
Associates, L.P.
Bradley I. Ruskin, Esq.
Carl Clyde Forbes, Esq.
Helene Debra Jaffe, Esq.
Jennifer R. Scullion, Esq.
Robert Davis Forbes, Esq.
Proskauer Rose LLP
11 Times Square
New York, New York 10036
(212) 969-3465
Thomas J. Ostertag, Esq.
Senior Vice President and General Counsel
Office of the Commissioner of Baseball
245 Park A venue
New York, New York 10167
(212) 931-7855
For Defendants Comcast Corporation, Comcast SportsNet Philadelphia, L.P.,
Comcast SportsNet Mid-Atlantic L.P., Comcast SportsNet
California, LLC, and Comcast SportsNet Chicago, LLC
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Arthur J. Burke, Esq.
James W. Haldin, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
(212) 450-4000
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